Tightening rules on for-profit colleges

05/06/2014

RISING STUDENT debt poses a serious problem, as do colleges that mislead students, take advantage of taxpayer-funded student aid or do a poor job of preparing students for work. But as much as we would like to believe that the Obama administration is serious about tackling these issues, we are troubled by proposed regulations that target for-profit collegeswhile largely letting the rest of higher education off the hook. The likeliest effect of the rule would be to make it more difficult for poor Americans to earn a secondary degree.

A proposal unveiled last month by the Education Department would cut off financial aid to career-oriented programs whose graduates have high student-loan debt relative to their incomes. This is the administration’s second attempt to impose the so-called gainful-employment rule. This measure was bitterly opposed by the for-profit education sector, which successfully sued to block the first version in 2012. The regulations, also criticized by both Democrats and Republicans in Congress, are now open for public comment.

Administration officials deny they are singling out for-profit institutions, arguing that the measures tying student debt and loan default to financial aid would apply to all career-training programs. Blurred in that claim is that degree programs in the for-profit sector would have to meet the stringent new standards but degree programs offered by public and private nonprofit institutions would not.

Steve Gunderson, who heads the Association of Private Sector Colleges and Universities, noted in a March 13 letter toEducation Secretary Arne Duncan that if the proposed debt-to-earning standards were applied across higher education, programs failing the metric would include the journalism program at Northwestern University, the law program at George Washington University and the social work program at Virginia Commonwealth University.

The for-profit education industry has come under scrutiny because of unscrupulous recruitment practices and shoddy programs at some schools. It is hard, though, to see the logic of requiring schools that serve a challenging population of poor and working-class students to meet 845 pages of cumbersome standards that even many traditional schools would be hard-pressed to meet, particularly since the wrongdoers are in the minority and new protections have already been put in place.

There are fairer and less punitive approaches to making schools accountable.Robert Silberman heads Strayer Education, which has a stellar reputation and would be able to meet the proposed standards, but, as he once told the New York Times, it would make more sense to require schools to share in the losses when students default or to establish a national eligibility test to screen out students who lack the skills to attend college. Harvard University researchers who examined for-profit programs recommended strengthening disclosure requirements or requiring counseling by an independent third party to make sure prospective students understand financial aid packages and student loan obligations.

Public comment on the draft ends May 27. Administration officials told us that they are open to all ideas and that nothing is set in stone. We hope that’s so, because the likely outcome of implementing the draft as written is that schools will admit only students who pose the least risk. That will make it harder for minorities, poor people and nontraditional students to get the kind of post-secondary education that might help them improve their lives.